Hoogenboom v. Trs. of Allied Servs. Div. Welfare Fund
| Decision Date | 24 March 2022 |
| Docket Number | Case No. 20-cv-4663 |
| Citation | 593 F.Supp.3d 826 |
| Parties | Carol HOOGENBOOM, Plaintiff, v. The TRUSTEES OF ALLIED SERVICES DIVISION WELFARE FUND, Defendants. |
| Court | U.S. District Court — Northern District of Illinois |
Francis E. Stepnowski, Oak Park, IL, Frank E. Stepnowski, Coghlan, Joyce, Kukankos, Urbut & D'Arcy, Chicago, IL, for Plaintiff.
Elizabeth L. Rowe, Jeremy Michael Barr, Justin Jon Lannoye, Dowd, Bloch, Bennett, Cervone, Auerbach & Yokich, Chicago, IL, for Defendants.
Medical provider Carol Hoogenboom (Plaintiff) initiated this action against Defendants, The Trustees of Allied Services Division Welfare Fund ("Defendants" or "Trustees"). In her Amended Complaint [20], Plaintiff alleges that the way Defendants handled bills she submitted to her patients’ health benefit plan ("the Plan") violates the Employee Retirement Security Act (ERISA). Defendants have moved to dismiss [22]. Because the Court agrees with Defendants’ view that Plaintiff cannot bring any claim under ERISA because she is not a valid assignee of her patients’ benefits under the Plan, the Court grants Defendants’ motion [22] in part. Accordingly, the Court (1) dismisses the ERISA-counts of Plaintiff's Amended Complaint [20], (2) relinquishes jurisdiction over Plaintiff's remaining state-law claim; and (3) grants Plaintiff's request [24] to remand the state-law claim to state court. A final judgment consistent with Federal Rule of Civil Procedure 58 will issue on the federal claim. Civil case terminated.
This Court provided a comprehensive recitation of the facts of this case in its prior order [19] granting in part and denying in part Defendants’ motion to dismiss Plaintiff's original complaint. Therefore, rather than regurgitate the Amended Complaint [20], the Court incorporates its June 8, 2021 Memorandum Opinion and Order and recapitulates below only the facts germane to today's decision.
Plaintiff, a licensed psychologist practicing in Illinois, provided psychological services to a family from 2014 through 2017. [20 (Am. Compl.) at ¶¶ 1, 12]. These patients were covered by an employee benefits program ("the Plan"), which is maintained by employer BSNF Railway Corporation ("BSNF") and subject to the Employee Retirement Security Act (ERISA). [Id. at ¶¶ 8–9]. Defendants, The Trustees of Allied Services Division Welfare Fund, administer that Plan. [Id. at ¶ 11].
The Amended Complaint focuses on Defendants’ alleged failure to process claims submitted by Plaintiff. In short, Plaintiff rendered services to the family and received payment for those services under the Plan. [20 (Am. Compl.) at ¶ 21]. Plaintiff submitted her bills to Defendants (by way of BlueCross BlueShield (BCBS)). [Id. at ¶ 18]. Although Defendants (or BCBS) issued some payments to Plaintiff for those services, Defendants allegedly discontinued payments at some time in 2015. [Id. at ¶¶ 21–22].
According to the Amended Complaint, at some time in 2015, Defendants directed BCBS to stop issuing payments to Plaintiff and directed Plaintiff to resubmit her bills using a different procedure code, "stat[ing] it would pay if the bills were resubmitted using the [other] codes," with which Plaintiff complied. [20 (Am. Compl.) at ¶¶ 22–24]. The Amended Complaint further states that in 2015, Defendants contended that they had made an overpayment of $781.56 for certain services. [Id. at ¶ 25]. Defendants withheld payments on Plaintiff's claims and advised that they "would process her claims when she refunded the overpayment." [Id. ] (Plaintiff disputes that the payment constitutes an overpayment.) [Id. at ¶ 26]. Defendants further delayed and obstructed the administration of claims by "refusing to pay claims * * *, refusing to supply information, and pretending not to be present when answering the telephone" when Plaintiff or her patients called. [Id. at ¶ 28]. Defendants also repeatedly asked for information about the claims, such as Plaintiff's progress notes, which Plaintiff submitted. [Id. at ¶¶ 29–31].
In 2015 and 2016, Defendants continued to refuse to pay Plaintiff and to ask for more information about the claims. [20 (Am. Compl.) at ¶¶ 35, 40]. However, Defendants asserted the claims were "closed," waiting for more information, not denied, which precluded Plaintiff from appealing the claims. [Id. at ¶¶ 35, 45]. Defendants cited as reasons to delay payments "the information [they] alleged was missing." [Id. at ¶ 36]. They "required [Plaintiff] to repeatedly submit her bills and progress notes, even after stating [they] had received the progress notes." [Id. at ¶ 40.] The Amended Complaint further alleges that Defendants refused to respond to inquiries on the status of bills or list claims for which they were withholding benefits and refused to respond to inquiries but did not inform Plaintiff which information was lacking. [Id. at ¶¶ 41, 44]. At some time in 2015 and 2016, Allied "sent partial explanation of benefit letters in envelopes with falsely dated postage marks." [Id. at ¶ 43].
Finally, at the heart of the current motion, the Amended Complaint alleges that the family assigned their rights to benefits to Plaintiff. [20 (Am. Compl.) at ¶ 48]. Defendants attached to the memorandum in support of its motion to dismiss [23] a copy of the Summary Plan Description/Plan Document.2 That document states that [ 23 -1 (Ex. A (Supplemental Decl. of Tamara Verush-Chesler), Ex. 1) at 5].
As noted above, Plaintiff Carol Hoogenboom, a medical provider, initiated this action against The Trustees of Allied Services Division Welfare Fund ("Trustees" or "Defendants"). See [1-1]. The welfare benefit plan central to this case is governed by ERISA. Claiming that Plaintiff's state-law claims contained in the original complaint [1-1] are preempted by ERISA, Defendants first removed the case to federal court and then moved to dismiss [8] that complaint in full.
Relevant here, the Court requested supplemental briefing on the effect on this case of the anti-assignment clause in the Summary Plan Description/Plan Document. Following briefing, the Court postponed ruling on the existence of subject matter jurisdiction over Plaintiff's original complaint because the issue was closely intertwined with the merits of Defendants’ motion to dismiss. See [19 at 6–7] (). The Court determined that it had subject matter jurisdiction at that stage to consider Defendants’ then-pending motion. Nevertheless, in resolving the motion, the Court stated that it reserved ruling on how the anti-assignment operated and left the door open to addressing the clause's enforceability in a subsequent motion to dismiss. See [19 at 7 n.4]. As to the merits of Defendants’ motion to dismiss [8], the Court agreed in part with Defendants’ argument, dismissing most of Plaintiff's state-law claims and relinquishing supplemental jurisdiction over the remaining, non-preempted state-law claim. See [19].
The Court also granted Plaintiff leave to amend. Plaintiff filed her Amended Complaint [20] soon after. The Amended Complaint asserts two claims under ERISA (Counts VIII and IX),3 seeking monetary damages for the reasonable and customary charges for her claims under ERISA § 502(a)(1)(B)4 and injunctive relief under § 502(a)(3) ordering Defendants to (1) cease, among other things, withholding certain benefits, and (2) to complete certain claims processing allegedly left in limbo by Defendants. Plaintiff also pressed forward with two state-law claims, for Promissory Estoppel (Count VI) and Interference with Prospective Economic Advantage (Count VII), the former of which was left partially intact following this Court's ruling [19].
Defendants moved again to dismiss the Amended Complaint [22], [23] under Federal Rule of Civil Procedure 12(b)(6). That motion is now before this Court.
To survive a Rule 12(b)(6) motion to dismiss for failure to state a claim upon which relief can be granted, the complaint typically must comply with Rule 8(a) by providing "a short and plain statement of the claim showing that the pleader is entitled to relief," Fed. R. Civ. P. 8(a)(2), such that the defendant is given "fair notice of what the * * * claim is and the grounds upon which it rests." Bell Atl. Corp v. Twombly , 550 U.S. 544, 555, 127 S.Ct. 1955, 167 L.Ed.2d 929 (2007) (alteration in original) (quoting Conley v. Gibson , 355 U.S. 41, 47, 78 S.Ct. 99, 2 L.Ed.2d 80 (1957) ). "A pleading that offers ‘labels and conclusions’ or ‘a formulaic recitation of the elements of a cause of action will not do.’ " Ashcroft v. Iqbal , 556 U.S. 662, 678, 129 S.Ct. 1937, 173 L.Ed.2d 868 (2009) (quoting Twombly , 550 U.S. at 555, 127 S.Ct. 1955 ). In determining whether the Amended Complaint meets this standard, the Court accepts as true all of Plaintiff's well-pleaded factual allegations and draws all reasonable inferences in Plaintiff's favor. Killingsworth , 507 F.3d at 618.
Defendants seek dismissal of the Amended Complaint in full, including the federal- and state-law claims. As for the federal claims, Defendants’ first line of defense is that Plaintiff does not have a right to bring a claim under ERISA because, as a medical provider, she does not qualify as a participant or beneficiary of an employee benefit plan. See . In the alternative, even if Plaintiff could bring an ERISA claim, any such claim would fail because Plaintiff has...
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